SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1999
--------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ------- EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission file number 0-18370
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MFRI, INC.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3922969
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7720 Lehigh Avenue Niles, Illinois 60714
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(Address of principal executive offices) (Zip code)
(847) 966-1000
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(Registrant's telephone number, including area code)
- ----------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
On June 10, 1999, there were 4,922,364 shares of the Registrant's common stock
outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying interim condensed consolidated financial statements of
MFRI, Inc. and subsidiaries (the "Company") are unaudited, but include all
adjustments which the Company's management considers necessary to present fairly
the financial position and results of operations for the periods presented.
These adjustments consist of normal recurring adjustments. Certain information
and footnote disclosures have been condensed or omitted pursuant to Securities
and Exchange Commission rules and regulations. These condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's annual
report to stockholders for the year ended January 31, 1999. Certain previously
reported amounts have been reclassified to conform to the current period
presentation. The results of operations for the quarter ended April 30, 1999 are
not necessarily indicative of the results to be expected for the full year 1999.
<TABLE>
MFRI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands except per share information)
<CAPTION>
Three Months Ended April 30,
1999 1998
------- -------
<S> <C> <C>
Net sales $29,539 $29,990
Cost of sales 22,250 22,228
------- -------
Gross profit 7,289 7,762
Selling expense 2,767 2,823
General and administrative expense 3,463 3,463
------- -------
Income from operations 1,059 1,476
Interest expense - net 676 576
------- -------
Income before income taxes 383 900
Income taxes 157 360
------- -------
Net income $ 226 $ 540
======= =======
Net income per common share - basic $0.05 $0.11
Net income per common share - diluted $0.05 $0.11
Weighted average common shares outstanding 4,922 4,981
Weighted average common shares outstanding
assuming full dilution 4,922 5,108
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE>
<TABLE>
MFRI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands except per share information)
<CAPTION>
April 30, January 31,
1999 1999
--------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 488 $ 579
Trade accounts receivable, net 19,291 20,892
Costs and estimated earnings in excess
of billings on uncompleted contracts 3,576 2,533
Deferred income taxes 2,814 2,812
Inventories 23,752 22,227
Prepaid expenses and other current assets 3,148 3,126
------- -------
Total current assets 53,069 52,169
Property, Plant and Equipment, At Cost 36,998 36,323
Less Accumulated Depreciation 9,876 9,474
------- -------
Property, plant and equipment, net 27,122 26,849
Other Assets:
Goodwill, net 13,928 14,200
Other, net 4,762 4,768
------- -------
Total other assets 18,690 18,968
------- -------
Total Assets $98,881 $97,986
======= =======
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current Liabilities
Accounts payable $11,184 $ 9,497
Commissions payable 4,786 4,855
Current maturities of long-term debt 1,351 1,664
Billings in excess of costs and estimated
earnings on uncompleted contracts 757 529
Other current liabilities 4,199 6,148
------- -------
Total current liabilities 22,277 22,693
Long-Term Liabilities:
Long-term debt, less current maturities 37,569 36,292
Deferred income taxes 2,256 2,257
Other 958 976
------- -------
Total long-term liabilities 40,783 39,525
Stockholders' Equity:
Common stock, $.01 par value,
authorized-15,000 shares; outstanding-
4,922 shares at April 30 and January 31 49 49
Additional paid-in capital 21,397 21,397
Retained earnings 14,798 14,572
Accumulated other comprehensive loss (423) (250)
-------- -------
Total stockholders' equity 35,821 35,768
------- -------
Total Liabilities and Stockholders' Equity $98,881 $97,986
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
<TABLE>
MFRI, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
<CAPTION>
Three Months Ended April 30,
1999 1998
------- -------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 226 $ 540
Adjustments to reconcile net income
to net cash flows from operating activities:
Provision for depreciation and amortization 920 802
Deferred income taxes - (235)
Change in operating assets and liabilities:
Trade accounts receivable 1,508 (384)
Costs and estimated earnings in excess of
billings on uncompleted contracts (1,046) (964)
Inventories (1,620) (1,018)
Prepaid expenses and other current assets (30) 496
Current liabilities 9 3,596
Other operating assets and liabilities (46) (73)
-------- --------
Net Cash Flows from Operating Activities (79) 2,760
-------- -------
Cash Flows from Investing Activities:
Decrease in restricted cash from
Industrial Revenue Bonds - 1,051
Net purchases of property and equipment (1,100) (1,030)
-------- --------
Net Cash Flows from Investing Activities (1,100) 21
-------- -------
Cash Flows from Financing Activities:
Payments on capitalized lease obligations (62) (112)
Proceeds from (repayment of) long-term debt 1,180 (3,101)
-------- --------
Net Cash Flows from Financing Activities 1,118 (3,213)
-------- --------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents (30) 8
-------- -------
Net Decrease in Cash and Cash Equivalents (91) (424)
Cash and Cash Equivalents - Beginning of Period 579 976
-------- -------
Cash and Cash Equivalents - End of Period $ 488 $ 552
======== =======
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
MFRI, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
APRIL 30, 1999
1. Inventories consisted of the following:
(In thousands)
<TABLE>
<CAPTION>
April 30, January 31,
1999 1999
--------- -----------
<S> <C> <C>
Raw materials $16,405 $16,313
Work in process 2,422 2,494
Finished goods 4,925 3,420
------- -------
Total $23,752 $22,227
======= =======
</TABLE>
2. Supplemental cash flow information:
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1999 1998
------- -------
<S> <C> <C>
Cash paid during the quarter for:
Interest, net of capitalized amounts $ 564 $ 218
Income taxes, net of refunds received 97 30
</TABLE>
3. The basic weighted average shares reconcile to diluted weighted average
shares as follows:
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1999 1998
------- -------
<S> <C> <C>
Net Income $ 226 $ 540
======= =======
Basic weighted average common shares
outstanding 4,922 4,981
Dilutive effect of stock options - 127
-------- -------
Weighted average common shares
outstanding assuming full dilution 4,922 5,108
======== =======
Net income per common share - basic $0.05 $0.11
Net income per common share - diluted $0.05 $0.11
</TABLE>
At April 30, 1999 and 1998, the weighted average number of stock
options not included in the computation of diluted earnings per share
of common stock because the options exercise price exceeded the average
market price of the common shares were 834,000 and 75,000,
respectively. These options were outstanding at the end of each of the
respective quarters.
4
<PAGE>
4. The components of comprehensive income, net of tax, were as follows:
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1999 1998
------- -------
<S> <C> <C>
Net Income $ 226 $ 540
Change in foreign currency translation
adjustments (173) 8
-------- -------
Comprehensive income $ 53 $ 548
======== =======
</TABLE>
Accumulated other comprehensive loss presented on the accompanying
condensed consolidated balance sheets consists of the following:
(In thousands)
<TABLE>
<CAPTION>
April 30, January 31,
1999 1999
--------- -----------
<S> <C> <C>
Accumulated translation adjustment $ (295) $ (122)
Minimum pension liability adjustment
(net of tax benefit of $79) (128) (128)
-------- --------
Total $ (423) $ (250)
======== ========
</TABLE>
5. The Company has three reportable segments under the criteria of
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information." The Filtration
Products Business manufactures and sells a wide variety of filter
elements for air filtration and particulate collection systems. The
Piping Systems Business engineers, designs and manufactures specialty
piping systems and leak detection and location systems. The Industrial
Process Cooling Equipment Business engineers, designs and manufactures
chillers, mold temperature controllers, cooling towers, plant
circulating systems and coolers for industrial process applications.
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended April 30,
----------------------------
1999 1998
------- -------
<S> <C> <C>
Net Sales:
Filtration Products $13,378 $12,537
Piping Systems 9,304 10,652
Industrial Process Cooling Equipment 6,857 6,801
------- -------
Total Net Sales $29,539 $29,990
======= =======
Gross Profit:
Filtration Products $ 3,293 $ 2,951
Piping Systems 1,864 2,521
Industrial Process Cooling Equipment 2,132 2,290
-------- -------
Total Gross Profit $ 7,289 $ 7,762
======== =======
Income from Operations:
Filtration Products $ 1,139 $ 951
Piping Systems 174 470
Industrial Process Cooling Equipment 613 826
Corporate (867) (771)
--------- --------
Total Income from Operations $ 1,059 $ 1,476
======== =======
</TABLE>
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
April 30, 1999
The statements contained under the caption "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and certain other information
contained elsewhere in this report, which can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "continue",
"remains", "intend", "aim", "should", "prospects", "could", "future",
"potential", "believes", "plans" and "likely" or the negative thereof or other
variations thereon or comparable terminology, constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
are subject to the safe harbors created thereby. These statements should be
considered as subject to the many risks and uncertainties that exist in the
Company's operations and business environment. Such risks and uncertainties
could cause actual results to differ materially from those projected. These
uncertainties include, but are not limited to, economic conditions, market
demand and pricing, competitive and cost factors, raw material availability and
prices, global interest rates, currency exchange rates, labor relations and
other risk factors.
RESULTS OF OPERATIONS
MFRI, Inc.
Net sales of $29,539,000 for the quarter ended April 30, 1999 decreased 1.5%
from $29,990,000 for the comparable quarter one year ago. Gross profit of
$7,289,000 or 24.7 percent of net sales in the current year quarter decreased
6.1 percent from $7,762,000 or 25.9 percent of net sales in the prior year
quarter. The decreases in net sales and gross profit were attributable to lower
sales volume, mainly in the domestic piping systems business. These decreases
were partially offset by the sales and gross profit of Boe-Therm A/S
("Boe-Therm"), acquired in June 1998, and Nordic Air A/S ("Nordic Air"),
acquired in November 1998. The accounts of these businesses were not included in
the accounts of the Company prior to their respective dates of acquisition.
Net income decreased 58.1 percent from $540,000 or $0.11 per common share
(basic) in the prior year to $226,000 or $0.05 per common share (basic) in the
current year. The shortfall in sales volume described above coupled with higher
interest expense as a result of increased borrowings to fund acquisitions and
upgrades of manufacturing plants, were partially offset by selling, general and
administrative expense reductions.
Filtration Products Business
Net sales for the quarter ended April 30, 1999 increased 6.7 percent to
$13,378,000 from $12,537,000 in the comparable quarter one year ago. This
increase is the result of higher sales of filter elements for baghouses and
cartridge collectors, primarily due to the Nordic Air acquisition. Nordic Air's
sales for the quarter ended April 30, 1999 were $663,000.
6
<PAGE>
Gross profit as a percent of net sales increased to 24.6 percent from 23.5
percent, primarily as a result of improved manufacturing performance and the
Nordic Air Filtration acquisition.
Selling expense for the quarter ended April 30, 1999 was $1,244,000,essentially
flat compared to the $1,242,000 for the comparable quarter last year.
General and administrative expense increased to $910,000 in the current year
quarter from $758,000 for the comparable period one year ago. These changes are
due to additional administrative resources and expenses, primarily as a result
of the Nordic Air acquisition.
Piping System Products Business
Net sales decreased 12.7 percent from $10,652,000 in the prior year quarter to
$9,304,000 for the quarter ended April 30, 1999, primarily due to a decline in
domestic pipe sales.
Gross profit as a percent of net sales decreased from 23.7 percent to 20.0
percent, mainly resulting from a less favorable product mix of sales and
manufacturing inefficiencies related to the decline in sales volume.
Selling expense decreased from $724,000 in the prior year to $663,000 in the
current year. Marketing expenses were unusually high in the prior year due to
the introduction of the PROtherm products during the quarter ended April 30,
1998.
General and administrative expense decreased from $1,327,000 in the prior year
quarter to $1,027,000 in the current year quarter, primarily due lower general
and administrative expenses of foreign subsidiaries and other miscellaneous cost
reductions in the current year. In addition, prior year general and
administrative expenses included legal costs related to a patent infringement
lawsuit.
Industrial Process Cooling Equipment Business
Net sales of $6,857,000 for the quarter ended April 30, 1999 increased 0.8
percent from $6,801,000 for the comparable quarter in the prior year, due to the
inclusion of the operating results of Boe-Therm in the current year. Boe-Therm's
sales for the quarter ended April 30, 1999 were $1,012,000.
Gross profit as a percent of net sales decreased from 33.7 percent in the prior
year quarter to 31.1 percent in the current year quarter, primarily as a result
of discounting and a less favorable product mix of sales in the current year.
Selling expenses of $859,000 were essentially flat compared to $857,000 for the
comparable period in the prior year.
General and administrative expenses increased from $607,000 in the prior year
quarter to $660,000 in the current year quarter due to the inclusion of the
operating results of Boe-Therm in the current year.
7
<PAGE>
General Corporate Expenses
General corporate expenses include general and administrative expense not
allocated to business segments and interest expense.
General and administrative expense increased from $771,000 in the prior year
quarter to $867,000 in the current year. The increase was due primarily to
higher medical claims expense in the current year.
Interest expense increased to $676,000 for the quarter ended April 30, 1999 from
$576,000 in the prior year, mainly due to higher borrowings as a result of the
acquisitions of Boe-Therm and Nordic Air, coupled with increased borrowings
under the Industrial Revenue Bonds compared to the prior year.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Operating Cash Flow
Cash and cash equivalents as of April 30, 1999 were $488,000 as compared to
$579,000 at January 31, 1999. Net proceeds from long-term debt of $1,180,000
were used to fund net cash outflows of $79,000 from operating activities,
purchases of property, plant and equipment of $1,100,000 and net repayment of
capital lease obligations of $62,000.
Net cash outflows from operating activities were $79,000 for the three months
ended April 30, 1999 versus net cash inflows of $2,760,000 for the same period
one year ago. This decrease was largely due to increased working capital levels
in the current year, primarily resulting from increases in inventories and costs
and estimated earnings in excess of billings on uncompleted contracts, partially
offset by decreases in accounts receivable. Working capital levels declined
during the same period in the prior year, mainly due to increases in accounts
payable.
Net cash used for investing activities during the quarter ended April 30, 1999
was $1,100,000, while net cash provided by investing activities for the same
period in the prior year was $21,000. Capital expenditures increased from
$1,030,000 in the prior year quarter to $1,100,000 in the current year quarter.
Cash received from the restricted cash of the Industrial Revenue Bonds in the
prior year quarter was $1,051,000.
In the quarter ended April 30, 1999, net cash provided by financing activities
was $1,118,000. Net proceeds from long-term debt of $1,180,000 was partially
offset by repayment of capital lease obligations of $62,000. In the prior year
quarter, net cash used for financing activities was $3,213,000 to repay capital
lease obligations and long-term debt.
The Company's current ratio at April 30, 1999 was 2.4 to 1 versus 2.3 to 1 at
January 31, 1999. Debt to total capitalization increased to 52.1 percent from
51.5 percent at January 31, 1999.
8
<PAGE>
Financing
On December 15, 1996, the Company entered into a private placement with
institutional investors of $15,000,000 of 7.21 percent unsecured senior notes
due January 31, 2007 (the "Notes due 2007"). The Notes due 2007 require level
principal payments beginning January 31, 2001 and continuing annually
thereafter, resulting in a seven-year average life.
On September 17, 1998, the Company entered into a private placement with
institutional investors of $10,000,000 of 6.97 percent unsecured senior notes
due September 17, 2008 (the "Notes due 2008"). The Notes due 2008 require level
principal payments beginning September 17, 2002 and continuing annually
thereafter, resulting in a seven-year average life.
On December 19, 1996, the Company entered into an unsecured credit agreement
with a bank. Under the terms of the agreement as most recently amended, the
Company may borrow up to $6,000,000 under a revolving line of credit, which
matures on March 31, 2001. Interest rates are based on one of two options
selected by the Company at the time of each borrowing - the prime rate or the
LIBOR rate plus a margin for the term of the loan. At April 30, 1999, the prime
rate was 7.75 percent and the margin added to the LIBOR rate, which is
determined each quarter based on the Company's interest coverage ratio, was 2.50
percent. The Company had borrowed $1,750,000 under the revolving line of credit
at April 30, 1999. Additionally, $721,000 was drawn under the agreement as
letters of credit principally to guarantee performance to third parties
resulting from various trade activities and to guarantee performance of certain
repairs and payment of property taxes and insurance related to the mortgage note
secured by the manufacturing facility and equipment located in Cicero, Illinois.
On September 14, 1995, the Filtration Products Business in Winchester, Virginia
received $3,150,000 proceeds of Industrial Revenue Bonds, which mature on August
1, 2007, and on October 18, 1995, the Piping Systems Business in Lebanon,
Tennessee received $3,150,000 proceeds of Industrial Revenue Bonds, which mature
on September 1, 2007. These bonds are fully secured by bank letters of credit,
which the Company expects to renew, reissue or extend prior to each expiration
date during the term of the bonds. The bonds bear interest at a variable rate,
which approximates five percent per annum, including letter of credit and
remarketing fees. The bond proceeds were available for capital expenditures
related to manufacturing capacity expansions and efficiency improvements during
a three-year period which commenced in the fourth quarter of 1995 and ended
during the Company's fiscal quarter ended October 31, 1998. Each bond indenture
established a trusteed project fund for deposit of the bond proceeds, the
balance of which was invested as authorized by the indenture and limited by
applicable law. As of October 31, 1998, $1,042,000 of the invested funds had not
been disbursed and will be used to redeem a portion of the principal of the
bonds outstanding. As provided by the indenture, the Company has directed the
trustee to apply such funds to the redemption of Bonds at the earliest possible
date, and has reduced the principal portion of the bonds by the amount of
unspent funds at April 30, 1999.
On May 8, 1996, the Company purchased a 10.3-acre parcel of land with a
67,000-square foot building adjacent to its Midwesco Filter property in
Winchester, Virginia for approximately $1.1 million. The purchase was financed
80 percent by a seven-year mortgage note bearing interest at 8.38 percent and 20
percent by the industrial revenue bonds described above.
9
<PAGE>
On June 30, 1998, the Company borrowed $1,400,000 under a mortgage note secured
by the manufacturing facility and equipment in Cicero, Illinois acquired in the
TDC acquisition. The loan bears interest at 6.76 percent and the term of the
loan is ten years with an amortization schedule of 25 years.
On June 1, 1998, the Company obtained two loans from a Danish bank to partially
finance the acquisition of Boe-Therm. The first loan in the amount of 4,500,000
Danish krone ("DKK") (approximately $650,000) is secured by the land and
building of Boe-Therm, bears interest at 6.48 percent and has a term of twenty
years. The second loan in the amount of 2,750,000 DKK (approximately $400,000)
is secured by the machinery and equipment of Boe-Therm, bears interest at 5.80
percent and has a term of five years. In addition, on February 16, 1999, the
Company obtained a loan from a Danish bank in the amount of 850,000 DKK
(approximately $125,000) to finance the purchase of a parcel of land directly
adjacent to the manufacturing facility in Assens, Denmark. This loan is secured
by the land and building purchased.
The Company also has short-term credit arrangements utilized by its European
subsidiaries. These credit arrangements are generally in the form of overdraft
facilities or accounts receivable factoring arrangements at rates competitive in
the countries in which the Company operates.
YEAR 2000
Many computer systems in use today were designed and developed using two digits,
rather than four, to specify the year. As a result, such systems may not
correctly recognize the year 2000, which could cause computer applications to
fail or to create erroneous results. The Company recognizes this as a potential
risk and has implemented a plan to address the Year 2000 issue.
The Company's State of Readiness
The Company has instituted an internally managed Year 2000 Plan to identify,
test and correct potential Year 2000 problems, including non-information
technology systems and impacts from outside parties including suppliers,
customers, and service providers. The Company's efforts have included obtaining
vendor certifications, direct inquiry with outside parties, and the performance
of internal testing on software products and controls. Although the Company can
provide no assurances that all Year 2000 problems will be identified, the
Company expects to be Year 2000 compliant as of December 31, 1999.
Costs to Address the Company's Year 2000 Issues
The costs incurred by the Company related to the Year 2000 issue were the time
spent by employees to address this issue and the costs of outside contractors to
provide assistance with programming. The total Year 2000 costs have not been and
are not expected to be material to the Company's financial position or results
of operations. As of June 10, 1999, total costs of outside services to reach
Year 2000 compliance were estimated to be $100,000.
10
<PAGE>
The Risks of the Company's Year 2000 Issues
The Company's primary risk with respect to the Year 2000 issue is the inability
of external parties to provide goods and services in a timely, accurate manner,
resulting in production delays and added costs while pursuing alternative
sources. While there can be no guarantee that the systems of other parties on
which the Company's operations rely will be Year 2000 compliant, the Company
believes that the performance of the Year 2000 Plan and the contingency plans
will ensure that this risk will not have a material adverse impact to the
Company.
The Company's Contingency Plans
The Company has completed contingency plans that address recovery of its
critical information systems. Ongoing updates to these plans will continue
throughout 1999, and will consider the Company's ability to perform certain
processes manually, repair or obtain replacement systems, change suppliers
and/or service providers, and work around affected operations.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description
----------- -----------------------
27 Financial Data Schedule
(b) Reports on Form 8-K - None
11
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MFRI, INC.
Date: June 11, 1999 /s/ David Unger
----------------------------------------
David Unger
Chairman of the Board of Directors
Date: June 11, 1999 /s/ Michael D. Bennett
------------------------------------------
Michael D. Bennett
Vice President, Secretary and Treasurer
(Principal Financial and Accounting Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 1999 AND THE
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND CASH FLOWS FOR THE THREE
MONTHS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-START> JAN-31-1999
<PERIOD-END> APR-30-1999
<CASH> 488000
<SECURITIES> 0
<RECEIVABLES> 19291000
<ALLOWANCES> 0
<INVENTORY> 23752000
<CURRENT-ASSETS> 53069000
<PP&E> 36998000
<DEPRECIATION> 9876000
<TOTAL-ASSETS> 98881000
<CURRENT-LIABILITIES> 22277000
<BONDS> 37569000
0
0
<COMMON> 49000
<OTHER-SE> 35772000
<TOTAL-LIABILITY-AND-EQUITY> 98881000
<SALES> 29539000
<TOTAL-REVENUES> 29539000
<CGS> 22250000
<TOTAL-COSTS> 22250000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 676000
<INCOME-PRETAX> 383000
<INCOME-TAX> 157000
<INCOME-CONTINUING> 226000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 226000
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
